Zynerba in exciting run-up to clinical readouts on CBD skin gel Zygel to treat Fragile X syndrome

• Developing novel transdermal CBD treatments to treat patients suffering rare epilepsies and neurological disorders
• Lead development candidate Zygel offers a potential goldmine of therapies for multiple conditions
• On track to report topline results from tests of its CBD gel treatment for children with Fragile X syndrome in 2Q 2020

What Zynerba does:

Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) is doing trailblazing work pushing clinical trials for cannabis-derived treatments. The specialty pharma company is developing novel transdermal CBD treatments for patients suffering rare epilepsies and neurological disorders.

The Devon, Pennsylvania-based company’s main product candidate is Zygel, a patent-protected CBD skin gel, which was earlier known as ZYNOO2. 

Recent studies have suggested that neuropsychiatric conditions like Fragile X Syndrome - the most common form of inherited learning disability and attention deficit disorder - are associated with a disruption in the endocannabinoid system, and CBD may improve certain core social and behavioral symptoms by modulating the biological system.

Zygel also offers a potential goldmine of therapies for other conditions. In addition to Fragile X Syndrome, the gel is in clinical development in patients with refractory epilepsy, Autism Spectrum Disorder and 22q11.2 Deletion Syndrome, a disorder caused by a small missing piece of the 22nd chromosome. This tiny missing portion can affect every system in the body.

Zygel is also being tested for a heterogeneous group of rare and ultra-rare epilepsies known as developmental and epileptic encephalopathies (DEE).

How is it doing:

In May, Zynerba revealed that it ended its first quarter with cash reserves of $60.6 million as it advances its flagship Zygel CBD gel to treat Fragile X syndrome (FXS). For its first quarter ended March 31, 2020, the company reported research expenses of $6.9 million as it heads into key trials.

Management believes the cash runway is sufficient to fund operations and capital requirements beyond the expected New Drug Application (NDA) submission and potential approval of Zygel in FXS and into the second half of 2021.

Crucially, Zynerba has completed enrolment with 212 patients randomized into CONNECT-FX, a pivotal, multinational, randomized, double-blind, placebo-controlled trial evaluating the efficacy and safety of Zygel in treating common behavioral symptoms of Fragile X syndrome.

The company expects to report topline results late in the second quarter of 2020. If the results are positive, Zynerba intends to request a meeting with the US Food and Drug Administration (FDA) to determine the acceptability of the data as a basis for an NDA.  

Fragile X is a genetic condition caused by a mutation in the FMR1 gene. The mutation causes the X chromosome to appear constricted, or fragile, under a microscope, hence its name. Patients with Fragile X often have learning disabilities and other cognitive impairments. 

As of May 8, 96% of the 188 patients who completed the 14-week blinded portion of the CONNECT-FX trial have enrolled in the open-label extension trial.

Meanwhile, the company is also studying Zygel to treat autism spectrum disorder (ASD), which is characterized by challenges with social skills and speech. Thirty-seven children with moderate to severe ASD have been enrolled in the 14-week open-label exploratory Phase 2 BRIGHT trial. The trial is designed to weigh the safety and potential of Zygel as an add-on to standard treatment of pediatric and adolescent patients with ASD. Zynerba also expects to report topline results from that study in the second quarter of 2020.

Zynbera is also conducting the 14-week Phase 2 INSPIRE trial to evaluate the safety, tolerability and efficacy of Zygel in about 20 children and adolescents (ages six through 17) with genetically confirmed Deletion Syndrome (22q). Zynerba now expects to report topline results from this study in the third quarter of 2020.

The company said that based on positive topline results from BELIEVE 1, an open-label, multidose Phase 2 clinical trial it expects to meet with the FDA to discuss a pathway for Zygel in Developmental and Epileptic Encephalopathies (DEE) in the first half of 2020. The BELIEVE 1 trial enrolled 48 patients between the ages of three and 16 who received weight-based initial doses of 250 milligrams (mg), or 500 mg daily of Zygel. In a positive sign, Zygel achieved a 44% median seizure reduction in focal impaired awareness and convulsive seizures in DEE patients by month two, and reductions were sustained through month six of treatment.

In response to the coronavirus pandemic, Zynerba has implemented initiatives to ensure the safety of patients, clinical investigators and their staff. Zynerba believes this should allow it to conclude all three of its ongoing clinical trials and report top-line results within its stated timelines.

In a boost for the company, the US patent office recently granted Zynerba a patent for treating ASD, with CBD. This is in addition to the patent it received in December 2019 for Zygel to treat FXS. The patent, which expires in 2038, covers the company’s method of transdermally administering 250 mg to 500 mg of CBD daily in the form of a gel or cream.  

Clearly, the company has set the stage for the next 12 months to be potentially transformational as it reports on its trials.

Inflection Points

• Expects to report topline results late in the second quarter of 2020 from its pivotal Phase 2/3 clinical trial CONNECT-FX
• Expects to submit its NDA for Zygel in Fragile X syndrome to the FDA in the second half of 2020, with potential approval by mid-year 2021
• What GW Pharmaceuticals achieved with its cannabis-derived Epidiolex treatment for seizures underlines the latent potential of Zynerba
• If GW Pharma’s Epidiolex is aimed at 35,000 to 40,000 patients suffering rare epilepsies, Zygel is looking at double the market for just Fragile X syndrome and almost a million patients are diagnosed with autism 
• If successful, Zygel has the potential to become the first product for the treatment of behavioral symptoms of Fragile X syndrome
• A positive data readout for Zynerba in any one of its many clinical trials can create serious momentum

What the CEO says:

“With a number of shots-on-goal in our clinical pipeline, each with near term milestones, our outlook is promising for the remainder of 2020 and beyond,” Zynerba Pharmaceuticals CEO Armando Anido has said.

“We are positioned for major news events throughout this year and next, including the topline results from our pivotal CONNECT-FX trial of Zygel in patients with Fragile X syndrome which are expected late next quarter.”

What the broker says:

Roth Capital Partners has a ‘Buy’ rating on Zynerba with an $11 price target (current share price is at around $4.12), noting the potential promise of Zygel gel which is targeted at four developmental disorders.

“Near-term, the main risks, in our opinion, include clinical trial uncertainty for three of the four main Zygel indications,” Roth analyst Scott Henry said in a recent note.

But those risks also make Zynerba’s stock a compelling value story, Henry noted.

“With shares now trading at (less than) 1/3 of the yearly highs and cash now north of 50% of the market cap… We believe that this presents a more opportune time for an investor entry point. Further, cash is somewhat robust with a runway into 2H21,” he added.

Contact the author Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive

Story by ProactiveInvestors